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Rural Air Travel Subsidies Gain Big Budget Boost

posted on July 17, 2009

WASHINGTON — A much-criticized subsidy for rural air travel would get a budget increase of more than 40 percent under a spending bill unveiled in the House on Monday.

The legislation approved by a House Appropriations subcommittee would give $173 million in the upcoming budget year to the Essential Air Service, which provides subsidies to small airlines to fly unprofitable routes. That's a $53 million increase.

In many cases the flights are nearly empty. In other instances, such as flights between Buffalo Niagara International Airport and Jamestown, N.Y., just 76 miles away, it's quicker to drive than fly.

The Bush administration sought unsuccessfully to cut the subsidies, which keeps flights going to 107 communities spread across 31 states in the continental U.S. and 45 tiny towns in Alaska. But the Essential Air Services program enjoys strong support among lawmakers; in April, 22 senators wrote White House budget director Peter Orszag to demand more money for it.

"Simply put, the Essential Air Service program was a promise made to rural America, and a promise that must be kept," the senators wrote.

Among the reasons for big increase is the upheaval in the airline industry, including higher fuel prices, and the larger subsidies required to attract new carriers into the program after other airlines drop out.

Indeed, the subsidies also have a new benefactor in President Barack Obama, who requested the big increase in his February budget submission despite acknowledging that the program is inefficient.

Even with the subsidies, the program is hardly a boon for many small carriers such as Great Lakes Airlines, which offers service to 20 states to communities such as Vernal, Utah, and Scottsbluff, Neb. Passenger loads are often small, meaning that the taxpayer subsidy can often far exceed the airfare.

The Bush administration proposed to eliminate about half of communities from the program — especially those close to larger airports — and fund it through $50 million in fees on airlines. Congress rejected the cuts.

The Obama administration says the program needs a huge budget increase simply to serve existing communities. That's hardly likely to assuage critics who view it as a boondoggle.

"There are certainly cases where it's easier to drive, take a train, take a bus than it is to fly back and forth," said Tom Schatz, president of the Citizens Against Government Waste.

The administration acknowledges the program's flaws.

"The program design must be updated and made more cost effective," Transportation Secretary Ray LaHood told lawmakers earlier this year, adding that there needs to be "a more sustainable program that will provide better value for passengers and the American taxpayer."

The legislation approved Monday by the House panel also provides a $4 billion appropriation to support construction of high-speed railroads, quadrupling Obama's request and coming in the wake of $8 billion provided in the economic stimulus bill.

The increase came as the panel flat-funded highway construction even as the bill's overall appropriation increased by 14 percent, according to a table distributed by Democrats. Republicans said the increases were more like 25 percent.

The Transportation Department has informed Congress that the Highway Trust Fund will become insolvent next month without an infusion of at least $5 billion.

The troubled Washington, D.C., Metro system would get a $150 million capital infusion to make repairs and replace rail cars. The system has long-overdue maintenance needs and recently sustained a crash that killed nine people.

The Amtrak passenger railroad would get a $1.5 billion subsidy, as requested by Obama.

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